Bulgarian Municipalities Seek Govt Aid to Save Projects Worth BGN 3 B
Bulgarian municipalities have demanded BGN 200 M from the government in order to prevent the loss of EU-funded projects worth BGN 3 B.
The call for immediate financial intervention was made after the end of a meeting of the Board of Directors of the National Association of Municipalities in the Republic of Bulgaria (NAMRB).
The NAMRB said in a statement that the work on projects worth BGN 3 B would stop unless the Cabinet provided a total of BGN 200 M by the end of the month in order to cover payments under the “Environment” operational program and compensate for the EU funds freeze imposed on it.
Todor Popov, Chair of the Board of Directors of NAMRB, argued that the sum of BGN 200 M was the bare minimum that would ensure that the implementation of all projects funded under the program would not stop.
NAMRB made clear that the EU funds freeze had caused contractors to start claiming their payments from municipalities in their capacity of parties to the contracts.
NAMRB predicted a wave of lawsuits for damages, adding that municipalities were expected to file claims to recover their expenses from the state and the managing authority of the operational program.
NAMRB expressed fears that the operational program would collapse altogether, adding that other operational programs were also at risk.
The Association cautioned that applications for bridge financing from the Fund for Local Authorities and Government (FLAG) involved huge amounts of money because the Fund had ended up as the sole creditor of municipalities but it did not have sufficient financial resources.
NAMRB declared that the FLAG fund needed at least BGN 60 M.
The Association argued that the state had to cover urgent payments under the “Environment” operational program from the reserve and to recover the costs at a later stage from the EU when the EU funds freeze was lifted.
NAMRB insisted that the current socialist-led government had to provide the money urgently because a potential caretaker government will not have the opportunity to make such a decision and the operational program would collapse.